The Market May Be Telling Us We're Entering A Capital Formation Cycle

Nelson Alves 4.29K Followers Follow Summary I’ve been looking at my clustering stock screener, and I think it is giving us a much more interesting macro signal than simply “energy stocks are strong.” What jumps out is that the portfolio is not simply long commodities. It is long capital intensity. AI alone is forcing an enormous amount of capital back into the physical economy. Data centers need servers, networking, cooling, power generation, transformers, transmission infrastructure, land and financing. At the same time, the energy system itself is constrained, industrial capacity has become more valuable, agricultural machinery is showing strength, governments are spending more on defense and infrastructure, and companies are spending more on compute. The economy is becoming capital-hungry again. Klaus Vedfelt/DigitalVision via Getty Images I’ve been looking at my clustering stock screener, and I think it is giving us a much more interesting macro signal than simply “energy stocks are strong.” The obvious read is scarcity. Roughly a third of the portfolio This article was written by Nelson Alves 4.29K Followers Follow Ex-trading desk at tradfi bankHead of Investment Research at KRIMaster in Finance